BIR Ruling No. 196-82

June 17, 1982 BIR RULING NO. 196-82 34-g 000-00 196-82 Far East Bank and Trust Company Muralla, Intramuros M a n i l a Attention: Mr . Sixto Marella, Jr . Asst . Corporate Secretary Gentlemen : This refers to your letter dated April 30, 1982 requesting a ruling as to whether the office of the Corporate Secretary of that company can be required to transfer and issue new certificates in the name of the transferee of newly issued shares of stock even without proof of payment of the capital gains tax due on the transfer of said shares of stock. It is represented that preparatory to your company's eligibility for issuance of expanded commercial banking authority under Batas Pambansa Blg. 61 and CB Circular No. 739, an arrangement was entered into with the stockholders of Private Development Corporation of the Philippines (PDCP) for the exchange of Far East Bank and Trust Company (FEBTC) shares of stock with the ratio of 7 shares of PDCP to one (1) share of FEBTC; that to consummate this arrangement, FEBTC issued original shares of stock to individual and corporate stockholders of PDCP; that these individual and corporate stockholders of PDCP in turn exchanged and ceded to FEBTC their existing shareholdings; that the individuals and corporate stockholders of PDCP to whom FEBTC issued original shares of stock disposed their newly issued shares of stock in FEBTC on February 22, 1982 and that the transferee presented to the office of the Corporate Secretary the instruments of transfer for the purpose of having new certificates issued in their name; and that the office of the Corporate Secretary is requiring proof of payment of the capital gains tax due on the transfer before the shares can be transferred in the name of the transferee. In reply, please be informed that while Revenue Regulations No. 14-80 as amended by Revenue Regulations No. 4-81 implementing Section 34(g) (before amendment by BP. Blg. 221) of the Tax Code as amended by P.D. 1739 provides for the payment of the final capital gains tax on the net capital gains derived during the taxable year from the sales, exchanges and transfers of shares of stock classified as capital assets upon the filing of the return on or before the fifteenth day of the fourth month following the close of the taxable year, the transferee of shares of stock who wants the immediate transfer in his name of such shares, may nevertheless, request the seller to pay the capital gains tax even before the end of the taxable year so that proof of payment can be presented to the Corporate Secretary for purposes of the issuance of the certificate of stock in the name of the transferee-purchaser. Should there be other stock transactions within the year, adjustment can be made at the end of the taxable year. cdtech Very truly yours, RUBEN B. ANCHETA Acting Commissioner